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The social media site appeared to have encouraged developers of games such as Ninja Saga, Angry Birds and PetVille to allow "friendly fraud" so they could rake in more revenues.

According to newly unsealed court documents, Facebook intentionally permitted children to spend money on its site without the knowledge of their parents. In some cases, even the children themselves weren't aware they were racking up hundreds or thousands of dollars already while they play their favorite online game via Facebook.

The years-long effort was thoroughly described in a class action lawsuit stating Facebook's alleged attempts to boost revenue for games such as PetVille, Angry Birds, Barn Buddy and Ninja Saga.

In one case, a 15-year-old son racked up $6,500 in in-game charges after playing a game on Facebook for two weeks, to which the company refused requests for refunds. Ironically, it looked like Facebook employees were actually aware that children were spending money without even realizing they were doing it.

The court documents, which cover 2010 to 2014, were unsealed after a request was made by Reveal, a website managed by The Center for Investigative Reporting. Reveal wrote in its investigatory article report, "Despite the many warning signs, which continued for years, Facebook made a clear decision. It pursued a goal of increasing its revenues at the expense of children and their parents."

The alleged distasteful business practice ended up with very high chargeback rates made by credit card companies that were forced to take measures on behalf of the parents who were unaware that their little ones had spent money using their credit card details.

Within a duration of three months between 2010 and 2011, more than 9% of money spent by children (without their parents' knowledge) via online games was retrieved back by credit card companies. The non-profit Merchant Risk Council regards a 1% chargeback rate as already high, whereas the Federal Trade Commission considers a 2% chargeback rate is definitely a red flag for a business being "deceptive".

The policy of Facebook appears to encourage game developers to create such spending tactics to simply increase revenues - a practice they internally call as FF or "friendly fraud".

According to an internal memo that circulated within the company, Facebook made a crass decision that told game developers to allow children spend money without their parents' consent. The memo said, "Friendly Fraud - what it is, why it's challenging, and why you shouldn't try to block it." The term "friendly fraud" is Facebook's jargon for when children spent money on games without their parents' consent. Also, Facebook internally labeled children who spent huge amounts of money on online games as "whales" - a casino jargon for gamblers who consistently bet large amounts of money.

In 2016, Facebook eventually settled the class action lawsuit, agreeing to "dedicate an internal queue to refund requests for in-app purchases made by US minors."

A Facebook spokesperson said via a statement released last month, "We were contacted by the Center for Investigative Reporting last year, and we voluntarily unsealed documents related to a 2012 case about our refund policies for in-app purchases that parents believe were made in error by their minor children. We intend to release additional documents as instructed by the court. Facebook works with parents and experts to offer tools for families navigating Facebook and the web. As part of that work, we routinely examine our own practices, and in 2016 agreed to update our terms and provide dedicated resources for refund requests related to purchase made by minors on Facebook."

This latest news adds to Facebook's numerous controversies in the past years. The social media site was previously accused to be involved in a high-profile data-mining scandal and blamed of not doing much to deter the activity of making dummy accounts and the spread of fake news online.

This story does leave a particularly nasty taste in the mouth and they should be ashamed of themselves if found guilty. I can only imagine the hardship that this has bestowed on some families and i hope that people can get some of their money back at least

Why will they refund the money, they count on that to happen.Look the game Fortnite , game are free to play and kids spending AVERAGE on it $84.67.Nothing you buy in game has no effect on playing. only look of skinsHow weird is thatFree game?

After all these years, now they got into this problem/It was a common knowledge. How many people with facebook accounts, havingchildren lost money, when their kids kept buying and buying from their devices.I know quite a few, friends and relatives.Like they cared in the first place. More money was going in their pockets.

yeah,now they "found" this problem,even all know that this is paying and that every person can use it!if you want better skills or whatever and dont want to play so many hours,you pay and you will make faster upgrade in everything!when they took so much money,now they want to cancel them this!

It is of course very bad that there is an opportunity to pay I only know the card number and the numbers on the reverse side ... there must be at least a confirmation by SMS so that the payment is made ... then there is a chance that the children will not be able to use their parents card ... but this not exactly

Posted by Mober:After all these years, now they got into this problem/It was a common knowledge. How many people with facebook accounts, havingchildren lost money, when their kids kept buying and buying from their devices.

One would ask why all these people gave their credit card info to the company in the first place?

This thing is not normal. If facebook encourages this, committing enormous illegality , especially as they left minors to play there and because of the laws. They accept the minors to deposit money but to withdraw not. My opinion is clear. This social networking site must be fined by the laws, the owners of the games same and the children receive back money deposited.

This of course very bad thing Facebook do, and if this is with documents and Facebook agree that they do this practice then i think it is big money to be returned and many penalty court say to pay for this company

Everyone should dump Facebook. It sucks up your time, bends your mind, and intentionally steals and sells your pics and information. This article will be old news in no time, like the many others about Facebook and their illegal practices. Why they are allowed to continue, is beyond me.

Because they are making billions in revenue, and because it works as free informationfor many agencies. Simple as that.Do you think it is hard for secret services all over the world, to get info on all thosedata, posted under their own will on the web?How the saying goes...? Like taking candy from a baby?

Facebook uses shady business practices? What a surprise. For people of my age it is already difficult to understand, why anyone would share their data with a company so freely. But linking one owns credit card with the acoount of their children is just asking for it.

Posted by shokaku:Facebook uses shady business practices? What a surprise. For people of my age it is already difficult to understand, why anyone would share their data with a company so freely. But linking one owns credit card with the acoount of their children is just asking for it.

Same people have Alexa or Google Home right on their nightstands and don't know what is wrong with willfully bugging your home.

Google has become quite scary lately...You start typing a couple of letters, and the result you are looking for,appears in a flash. Like they are reading your mind. With all those cookies, history, algorithms and whatever else they use,they keep getting more and more on target.

Cookies in the browser can be deleted, other search engines than the one from google can be used. In the end even here the user is giving away far to many infos for free, making it very easy for companies to nail him/her down. And one can expect that this will only get worse.

Modern life is a mix of voyeurism and exhibitionism. Some people like to perpetually broadcast their internal and external selves. I have multiple social media accounts but don't use them on a regular basis. I consider myself as a private person.

I am pretty sure my smartphone is listening on everything all the time because it is almost too much frequent that I have direct advertisment to my interests or random things I never browsed for only mentioned in conversations. Weird. Hello NSA, good to know you!

Unfortunately facebook in the last months blocked or disabled accounts that are bothering politically or for other religious reasons. Instead, they favor juveniles to play real money games or accept all sorts of dubious groups and many users with false accounts. It is very sad what is happening.

It is not uncommon to see that they always do something to get money also to minors as often happens with the issue of selling drinks to minors, let them go to the bars and many more things that are not relevant but there were always: s so this kind of thing does not really surprise me the truth

Posted by bowie1984:I am pretty sure my smartphone is listening on everything all the time because it is almost too much frequent that I have direct advertisment to my interests or random things I never browsed for only mentioned in conversations. Weird. Hello NSA, good to know you!

lot of people talk about this problem and that they get advertisment on facebook or some other page and that they even didnt search for that thing on google!just beacuse they talked about it!few days ago I talked with brother about that problem and his adverstiment on facebook!